How to Answer the Question: What’s Your Hourly Rate?

How to Answer the Question: What’s Your Hourly Rate?

What do you say when a prospect or client asks, “What’s your hourly rate?”

Do you instantly capitulate and respond with a number? Or do you take the lead in the conversation and respond with your “qualifying questions,” which are designed to help you determine if this client is a good fit for you?

I know what you’re thinking: “If they ask for my hourly rate, don’t I have to tell them?”

Well, no, actually, you don’t!.

Clients and prospects ask for an hourly rate because, more often than not, they don’t know any better. Other times, it’s because other designers have already given them their hourly rate and the client wants to be able to compare apples to apples.

The problem is that most clients don’t know there are several other pricing strategies to choose from, many of which are actually much better for them.

You see, the problem with answering, “What’s your hourly rate?” with a number, even a high number, is that your hourly rate is not a price. It has no context; unless you estimate how many hours you’re going to spend at that rate and then communicate that, you haven’t given them an actual price.

If you give them your hourly rate, and they compare it with another designer’s lower one, they may assume you’ll charge them more, which may not at all be the case, because you may be really fast.

Or if you give them your hourly rate, and they compare it with another designer’s higher one, they may assume your quality is lower and they may choose the higher one, just to be safe.

But all of these assumptions would be avoided if, in answer to the question, “What’s your hourly rate?” you answered with, “Well, that depends. Let me ask you some questions first.”

That’s when you begin qualifying, that is, gathering the information you need to determine if this client fits your criteria in the first place. Chances are, if they’re asking about your pricing before anything else, they may be cheap and/or difficult to handle. They may be looking for the lowest price, rather than the best value for their money.

All of that can be assessed if you engage them in a conversation first and ask the questions you need answers to before you can price a project, such as:

  • What are their objectives?
  • What is their decision-making process?
  • How many people are involved in that process?
  • What is their deadline?
  • And, of course, what is their budget, which they will rarely tell you. But you still need to ask, to show your professionalism and to get the money conversation going.

In fact, the “money conversation” is an excellent opportunity for you to do a bit of client education, to share details about how you price projects and why, for example, pricing per project is better than pricing hourly, for everyone involved.

If you don’t know why pricing per project is better than pricing hourly, I’ll tell you.

Because it takes the guessing out of the process. The client won’t be hoping you’re not spending too much time and you won’t be hoping they’ll pay you for all the time it takes. Together, you will agree to a price, that’s what you will charge and that’s what they will pay.

Frankly, I think the reason many designers resign themselves to hourly pricing is to avoid “the money conversation.” (There are, however, a few exceptions, which I’ve written about for HOWDesign.com here.)

So, if you’re pricing hourly, I highly recommend that you consider other options. Start by learning about all the pricing strategies at your disposal so can choose the one that works best. There are plenty to choose from, including project pricing (a.k.a. fixed fees or flat fees), package and tiered pricing, retainer pricing, value-based pricing and more. (I give an overview in this YouTube video, The 4 Simplest Pricing Strategies for Creative Professionals.)

Then, for each and every new project and client, you decide which strategy (or which combination of strategies) makes the most sense.


Ilise Benun - How to Answer the Question What’s Your Hourly RateAuthor Bio

Ilise Benun is the author of 7 books, including The Creative Professional’s Guide to Money, a business mentor and coach, a national speaker, the founder of Marketing-Mentor.com, the host of 2 podcasts (The HOW Design Live podcast & MarketingMentorPodcast.com), a Program Partner for HOW Design Live, and adjunct faculty at Maryland Institute College of Art.